It should have taken 30 days for Sanjaya Kumar (27) from Odisha to withdraw his father’s provident fund of Rs 40,000, the post-employment, rainy day ore retirement stash that companies must compulsorily deduct from salaries.
Instead, more than 1,825 days have passed since Kumar’s father Krushna Chandra (53) died in 2011. “Please help me withdraw PF money, my mother is worried about losing it,” said Sanjaya, in a complaint posted on an online forum.
Five years and three written complaints later, Kumar, has received no replies from the Employees’ Provident Fund Organisation (EPFO), a government body that receives provident-fund deductions from companies and administers 50 million provident fund accounts nationwide.
Chandra worked in a company called Target Allied Securities Private Limited in Bhubaneswar, Odisha, and though his colleagues got their provident fund, his family did not. Kumar, settled in Hyderabad, said that he has sent “numerous emails”–he’s lost count–to his father’s employer and the EPFO.
Target Allied Securities Private Limited told IndiaSpend in an email that they have deposited Chandra’s provident fund with the EPFO. Chandra’s kin, according to the company, has not submitted “the required documents” and that may be causing the delay.
“They’re not helping us, how can I go back and forth to Odisha from here?” asked Kumar. “My mother tells about it some times, but I have almost stopped chasing them.”
More than 10,000 companies–including 1,195 state-owned–nationwide have defaulted on provident-fund payments: 2,200 companies owe at least Rs 2,200 crore–to the EPFO, the portion of employee salaries they should have deposited.
The numbers of defaulting companies and institutions is growing. There were 10,091 defaulters in 2014-15, rising to 10,932 by December 2015.
Online consumer forums are flooded with complaints like those of Kumar’s, as hundreds of employees who have quit or retired from a company are deprived of their provident fund.
“We have received more than 2,000 RTIs (right-to-information request) in the last one-and-a-half years, seeking status of provident-fund refunds and reasons thereof,” said Vinoth R, co-founder of OnlineRTI.com, a Bangalore-based advocacy that helps people question the EPFO.
“We get lots of complaints from workers who have been denied their provident fund and also complaints of collusion between EPFO officials and employers,” said All-India Trade Union Congress secretary and EPFO trustee D.L. Sachdev.
A detailed questionnaire sent on June 29, 2016, to the Central Provident Fund Commissioner and the Central Vigilance Officer of EPFO and reminders on August 1 went unanswered.
In Budget 2015-16, the government decided to tax a part of provident fund. But widespread nationwide protests–some violent, especially in Bangalore–forced the government to rescind the decision.
The rainy day solution, hobbled by defaulting companies
Provident funds are meant to provide financial security to salaried employees, who must contribute 12% of their monthly salary with the employer contributing 13.6%.
Companies or institutions with more than 19 employees deposit the provident fund of each with the EPFO, which in turn deposits the money in an employee account that earns 8.8% interest from the government, which invests her provident fund in government securities and corporate bonds.
While employees can withdraw the entire amount after retirement or two months after resigning from a job, the EPFO allows partial withdrawals to pay for a home, education, marriage or an illness.
Establishments that deduct contributions from employees’ salaries, but do not deposit it with EPFO are termed defaulters.
Tamil Nadu, including Pondicherry, has India’s largest number of defaulting companies (2,644), followed by Maharashtra (1,692) and Kerala, including Lakshadweep (1,118).
Read it on IndiaSpend here
Feature image courtesy IndiaSpend
